Sunday, January 25, 2009

Gold break Up is the real story of the last week. GDL, GDX, HUI, XAU, SLV, AUY,

By any account it is called break Up and we were following this process for a while here. Gold has finally moved in a decisive mode even with US Dollar still holding at the recent Tops. Smart money are positioning itself for inflation protection, but the most important is that FED is ready to allow Gold to signal Inflation and END of Death talk about Deflation. Reason is very simple: banking system is insolvent as well as insurance network, with falling assets prices it will become apparent and will trigger CDS Derivatives which will collapse all financial system as we know it. By running Inflation expectations back into the system FED is not breaking any copyright of Mr Madoff: it was done for years before and it is the only way out. You are alive while you are running. Gold is aligned with Obama's dream to see his country strong again: first as an indicator of Inflation and then as a chance to come back with honest money. We will not bet on the second, but will make money on Obama's dream and first.

Technically our previous observations are confirmed by breaking up MA200 and pronouncing BUll is back! Downtreand line is broken to the Upside. MACD is at Buy with a cross over, RSI is strong in plus, STO is going Up. Retest of a break out will be in play, but it is a different message to the market place. No more uncertainty about the Gold Bull. It is well alive and ready to rock again.

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